Gross Domestic Product Equal To Social Well-Being
Gross Domestic Product Equal To Social Well-Being?
GDP is stand of "Gross Domestic Product"; we typically use it as a measurement of social well-being. However, it also comes up with some main criticisms when we are linking GDP together with social well-being. Should we use or only use GDP as a measurement of social well-being? Or, should we place a higher priority above the pursuit of economic growth? There are no absolute answers to these questions, but the argument itself has become absolute. As a human being, we are Homo sapiens whom full of emotional thought and action. Therefore, economic growth ought not to be use as a measurement of our social well-being. At least, linking them together is irrelevant.
The definition of "Gross Domestic Product" is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. We have to understand some basic concept of economic before we step into these arguments. The simplify explanation of economical activity (see the diagram 1), there are two main sectors: "Firms" and "Households". Households own the factor of production and let the firms use in return for payment, which are land, labor and capital. And also firms are producing goods and services which households will pay for (usually in monetary value). Furthermore, firms are paying rent for the land, wages for labor and also profit for capital in return. There are also some injections into the flow and leakages out from the flow; those injections are government spending, exports and investment. Taxations, Imports and Savings are the factors of leakages out from the flow. There is also an equation that represents these: GDP (Y) is a sum of consumption (C), investment (I), government spending (G) and net exports (X - M).
Y = C + I + G + (X - M)
Considering our society with economic growth, it is astonishingly that there are no evidences to prove that the high and sustainable economic growth is relating
GDP is stand of "Gross Domestic Product"; we typically use it as a measurement of social well-being. However, it also comes up with some main criticisms when we are linking GDP together with social well-being. Should we use or only use GDP as a measurement of social well-being? Or, should we place a higher priority above the pursuit of economic growth? There are no absolute answers to these questions, but the argument itself has become absolute. As a human being, we are Homo sapiens whom full of emotional thought and action. Therefore, economic growth ought not to be use as a measurement of our social well-being. At least, linking them together is irrelevant.
The definition of "Gross Domestic Product" is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. We have to understand some basic concept of economic before we step into these arguments. The simplify explanation of economical activity (see the diagram 1), there are two main sectors: "Firms" and "Households". Households own the factor of production and let the firms use in return for payment, which are land, labor and capital. And also firms are producing goods and services which households will pay for (usually in monetary value). Furthermore, firms are paying rent for the land, wages for labor and also profit for capital in return. There are also some injections into the flow and leakages out from the flow; those injections are government spending, exports and investment. Taxations, Imports and Savings are the factors of leakages out from the flow. There is also an equation that represents these: GDP (Y) is a sum of consumption (C), investment (I), government spending (G) and net exports (X - M).
Y = C + I + G + (X - M)
Considering our society with economic growth, it is astonishingly that there are no evidences to prove that the high and sustainable economic growth is relating